The Bank will be preparing its new quarterly forecasts as its policymakers head into their next rate-setting meeting in August - it usually likes to look out over a two-year horizon as that is how long interest rate changes take to affect the economy.
The upward march of oil prices since the May report raises the risk of much higher inflation in the short term but a lot of the activity data have been dire, leaving open the possibility of inflation undershooting the target in 2 years.
Many economists are now openly talking about recession as the housing market slide is turning out to be more pronounced than even the most pessimistic doomsayers had thought.
Figures for second quarter GDP will be out next week.
Barker told the Times she did not expect a 1990s-style recession and that there were still signs of life in retail sales. But the Bank's new forecasts will have to factor in the possibility of an even sharper slowdown in the economy.
"Clear downside risks to activity and employment" is how King characterised some of the latest news on Monday. But this, he said, had to be balanced against higher inflation becoming embedded in the system if people kept expecting prices to go up sharply.
Worrying about higher inflation expectations is one of the key reasons why the MPC stopped its rate-cutting campaign that started last December.
Policymakers gathering in May were surprised by the jump in the CPI rate to 3.0 percent in April. They could not cut rates when inflation was so clearly above the target.
But Barker pointed out that tipping the economy into recession by keeping policy too tight could also cost the MPC some credibility -- they don't want to be "inflation nutters."
One policymaker - David Blanchflower - has long been saying that worrying about inflation now is akin to fiddling when Rome burns, though his calls for cuts have fallen on deaf ears.
His colleagues will get their say this week. Andrew Sentance is speaking on Tuesday, the new chief economist, Spencer Dale, on Wednesday and deputy governor John Gieve on Friday.
The MPC makes its decision month-by-month. If the data keeps getting worse, August could be a close call.
